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The coalition isn’t working for the jobless

The government is ignoring the growing problem of youth unemployment — even as it fails to kick-star

I flew back to the United States just before Christmas, the day before Gatwick closed again. I got out just fine, but the flight I took, along with many others, was cancelled the next day. There was also chaos on the roads. If I recall correctly, the transport budget is going to be cut by 15 per cent in real terms, so things are surely going to get worse next year and the year after that and the year after that. What are a few potholes between friends?

At least there was good news from the US. Last month, in a rare show of bipartisanship, the House and Senate passed a big fiscal stimulus package, including cuts in payroll taxes. Plus, the Federal Reserve is doing more quantitative easing to help get unemployment down. In Britain, the latest data release on the labour market from the Office for National Statistics showed a big jump in autumn in the number of unemployed (up 35,000) and in the unemployment rate (from 7.7 per cent to 7.9 per cent). Unemployment rose to more than 2.5 million and was only 4,000 below the high point in the recession, in February 2010. Unemployment among women was at its highest since April 1988. The number of full-time jobs fell by an astounding 58,000.

Public-sector employment fell by 33,000 but private-sector employment stayed unchanged. It doesn't look like job creation in the private sector is going to make up for job destruction in the public sector.

Generation game

The adjacent chart suggests that the public believes that unemployment is on the rise and there are going to be fewer vacancies. It plots data from Nationwide's consumer confidence index, which asks respondents about what they think the employment situation will be six months ahead. It shows the percentage who say that there will be "not many/few jobs" available. This has risen sharply since May, when the coalition was formed.

Also plotted on the chart is data from the European Commission's consumer survey, which asks respondents what they think is going to happen to unemployment over the next 12 months. It is calculated as an index and has also risen sharply since the spring. The fear of unemployment is rising. Of particular concern is how, between August and September 2010 (the most recent data available), 81 per cent of the increase in overall unemployment was accounted for by youngsters under the age of 25: it was up 19,000 among 16-to-17-year-olds and 25,000 among 18-to-24-year-olds, out of a total increase of 54,000. Youth employment (ages 16-24) actually fell by 38,000.

blanchflower graph

In a paper I wrote with David Bell, published in the January 2011 edition of the National Institute Economic Review, we show that underemployment is especially prevalent among young people. Youngsters can't find jobs but when they do, these tend to be part-time rather than full-time; temporary rather than permanent; and often with fewer hours than they would like. They are also more likely than adults to be out of the labour force or inactive but to report that they want a job.

Once again, there is talk of a "lost generation" as youth unemployment heads inexorably towards the million mark – it is now at 943,000. Almost half the young people not in work surveyed for the latest Prince's Trust Youth Index claim that unemployment has caused them problems, including self-harm and insomnia. The survey, funded by the Macquarie Group Foundation and carried out by YouGov between 26 and 29 November 2010, showed that about one in six young people has found unemployment as stressful as a family breakdown, while more than one in ten claims that joblessness has given him or her nightmares.

The research, based on interviews with 2,170 16-to-25-year-olds, also shows how young people are twice as likely to self-harm or suffer panic attacks a year into unemployment. The charity's third annual youth index shows how those who are not in employment, education or training are less happy across all areas of their lives. More than half said that searching for work had left them feeling disillusioned or desperate.

Shamefully, the government is ignoring the problem of youth joblessness. The work programme it is about to launch is doomed to fail, as there are no jobs around, even if the government wants to pretend that there are. There are five unemployed people for every vacancy.

In response to a question on the increase in unemployment by the Labour leader, Ed Miliband, at Prime Minister's Questions on 15 December, David Cameron said: "While part of the figures are disappointing, they are mixed because we did see the claimant count has come down in the unemployment figures and also we are seeing an increase in the number of vacancies in our economy. Every day, there are another 10,000 vacancies. So, yes, we have got to get the private sector going, increase the number of jobs that are available." They sure do.

Pretty vacant

The claimant count, which excludes many of the unemployed, including all 16-to-17-year-olds, fell by a paltry 1,200. Cameron misspoke, as vacancies are not rising by 10,000 a day. Far from it. Over the quarter, they in fact grew by only 1,000. So, assuming there are about 91 days in every quarter, the number of vacancies grew by only 11 a day, not 10,000.

Anyway, this increase was driven primarily by a one-off increase in vacancies in the public sector. As is made clear in a note on page nine of the data release, the estimate for the three months to November 2010 includes vacancies for temporary jobs in connection with the 2011 census, which have been advertised by the Office for National Statistics since October 2010.

Excluding these census vacancies, there were 455,000 vacancies in the three months to November 2010, down 12,000 from the three months to August 2010, or 132 a day. Private-sector vacancies fell at a rate of 55 a day.

It doesn't look like the coalition government has got the private sector "going" yet. Net job creation in the private sector this quarter was zippo, zilch, nil, zero – that is, none at all. George Osborne's policies are not working.

David Blanchflower is a labour economist and a professor at Dartmouth College, New Hampshire, and the University of Stirling

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 03 January 2011 issue of the New Statesman, The siege of Gaza

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Jeremy Corbyn has transformed Labour from resisting social movements to supporting them

The opposition's new leadership has brought about a historic shift in its relationship with social movements.

“Another world is possible,” declared John McDonnell last month in his first major speech as Labour’s new shadow chancellor. These four words show how Labour’s leadership views its relationship with activists and campaigners outside the Westminster system. The slogan is the motto of the World Social Forum, an annual alternative to the ultra-elite World Economic Forum, formed by social movements across the world to struggle against, and build alternatives to, neoliberalism.

How times change. In a speech given at the George Bush Senior Presidential Library in Texas, United States, in April 2002, Labour leader and British Prime Minister Tony Blair offered his support to the administrators of the global economy, not those demonstrating against them.

He said: “It's time we took on the anti-globalisation protestors who seek to disrupt the meetings international leaders have on these issues. What the poor world needs is not less globalisation but more. Their injustice is not globalisation but being excluded from it. Free enterprise is not their enemy; but their friend.”

In 2002, Labour’s leadership wanted to take on social movements. Now, it intends to engage with and support them. “The new kind of politics” of Labour’s new leader, Jeremy Corbyn, is about more than focusing on issues over personalities and (anti-) presentational changes.

It is also “a new politics which is based on returning the Labour party to its roots. And the roots of the Labour party was as a social movement, representing the vast majority of working people in this country,” as McDonnell, Corbyn’s closest political ally, explains to the New Statesman.

Campaigners outside of the Labour party are excited. John Hilary, executive director of War on Want, a campaigning anti-poverty NGO, tells the New Statesman, “there’s a really positive impulse to the Corbyn/McDonnell leadership reaching out” to social movements. For Hilary, the immediate policy changes on TTIP – the EU-US investor rights, regulation harmonisation and non-tariff barriers deal negotiated behind closed doors – and a Financial Transaction Tax have already sent “a message to a disenfranchised part of the electorate that Labour is back”.

But, for the campaigners outside of the Labour party, this moment is not without risks. Political parties have a long record of crushing the autonomy of social movements.

“It’s important they aren’t incorporated or have to work on the terms of the political system. It’s a matter of a respectful relationship,” explains Hilary Wainwright, a political activist and founder and co-editor of Red Pepper magazine. Wainwright argues for “close engagement [between Labour and outside campaigners] that isn’t a bossy dominating one. One that seeks to collaborate, not govern”.

McDonnell agrees. “The most important thing,” he says, “is that all of the campaigns and social movements that are campaigning at the moment and those that will campaign in the future, need to maintain their autonomy from government and political parties. We respect that . . . Otherwise, we’ll undermine their vitality and their independence.”

To remain “strong, independent and radical” is “the most helpful” campaigners can be to Labour’s leadership, according to Hilary. Labour’s leadership “don’t look to us to make the sort of political compromises that they might have to do in order to hold a much broader spectrum of people together. What we can do best is hold that line as we believe it be right and support the Labour leadership in taking a line as close as possible to that”, he says.

The task for social movements and campaigners outside of the party is “to show how there will be popular support for radical and principled positions”, according to Hilary.

To win in 2020, Labour will “bring together a coalition of social movements that have changed the political climate in this country and, as a result of that, changed the electoral potential of the Labour Party as well”, says McDonnell. For Labour’s shadow chancellor, the people's views on issues are complex and fluid rather than static, making the job of politicians to bump up as close to them as possible.

Movements can help shift political common sense in Labour’s direction. Just as UK Uncut placed the issue of tax avoidance and tax justice firmly on the political map, so too can other campaigners shift the political terrain.

This movement-focused perspective may, in part, explain why the Corbyn campaign chose to transform itself last week into the Momentum movement, a grassroots network open to those without Labour membership cards. This approach stands in contrast to Blair’s leadership campaign that evolved into Progress, a New Labour pressure group and think tank made up of party members.

In order to allow movements the space to change the terms of the debate and for Labour to develop policy in conjunction with them, the party needs “to engage with movements on their own terms”, according to Wainwright. This means “the party leadership need to find out where people are struggling and where people are campaigning and specifically work with them”, she continues.

McDonnell says it will. He says Labour “want to work alongside them, give them a parliamentary voice, give them a voice in government but, more importantly, assist them in the work that they do within the wide community, both in meetings, demonstrations and on picket lines”.

This position is not one you would expect from McDonnell’s five more recent predecessors: Chris Leslie, Ed Balls, Alan Johnson, Alistair Darling, Gordon Brown. So, “this may seem like a unique moment if you’re looking just within the British context. But, if you look outside Britain it’s actually much more in touch with movements in many places in the world”, says Hilary.

He adds: “Political parties are going to have to have much more honest engagements between parliamentary politics and the social movement hinterland. For us, it just means that in a wonderful way, Britain is catching up with the rest of the world.”

McDonnell too sees this shift in how Labour engages with movements as “a historic change that modernises the Labour party”.

But, perhaps for Labour, this is a recurrence rather than a transformation. The party grew out of Britain’s biggest social movement: the unions. Labour’s new leadership’s openness to campaigners “modernises it by taking it back to being a social movement again”, says McDonnell.